Closely tied to the design and development of The Bard's Tale III: Thief of Fate, Dragon Wars was published under Activision and, therefore, bears no connection to the Bard's Tale series.

From the box text:

The designers of the Bard's Tale series, Wasteland, and Battle Chess pooled their talents to create the ultimate role-playing fantasy. They knew it had to be a first-rate story with sophisticated graphics. The result was Dragon Wars.

Sailing across uncharted seas, you and your party are in search of a legendary paradise called Dilmun - a place where the streets are paved with gold and no one wants for anything.

However, King Drake of Phoebus has declared all magic illegal - magickers have been slain or fled into exile. In retaliation, enemy islands have threatened to unleash their guardian dragons, the most destructive force in the world. While docked at a harbor in Dilmun, you are arrested on suspicion of spellcasting.

Imprisoned and stripped of everything but your wits, you are sentenced to life in a cesspool called Purgatory. Magic is your only salvation - a worldly possession in a world possessed.